Gold prices steady with CPI in sight, copper creeps higher

investing.com:

Investing.com-- Gold prices moved little on Tuesday as the dollar arrested recent losses before key U.S. inflation data due later this week, while copper prices held on to recent gains on hopes that the worst had passed for China’s economy. 

Bullion prices found some relief in recent sessions as the dollar retreated from a near six-month peak on some profit taking. But the greenback steadied in Asian trade on Tuesday, remaining within sight of recent highs.

The outlook for U.S. inflation and interest rates remained high, pointing to more pressure on gold prices in the coming months. This trade had also battered gold through the past year, as rising interest rates pushed up the opportunity cost of investing in bullion.

Spot gold steadied at $1,922.61 an ounce, while gold futures expiring in December fell 0.1% to $1,945.35 an ounce by 00:54 ET (04:54 GMT). 

Focus is now squarely on a consumer price index inflation reading for August, which is expected to show inflation growing at a faster pace than July. U.S. inflation is expected to have picked up amid higher fuel costs and resilient retail spending. 

The reading is also expected to set the tone for a Federal Reserve meeting next week, with higher inflation giving the central bank more impetus to keep rates higher, or even hike them further this year.

While the bank is widely expected to keep rates on hold in September, a stronger inflation reading could elicit a more hawkish outlook from the Fed. The central bank is also set to keep rates at over 20-year peaks until at least mid-2024.

Such a scenario presents a weak outlook for gold, given that the dollar and Treasury yields are likely to rise further in a high interest rate environment. Waning fears of a U.S. recession